Guest blog post by Damaris, Olaechea, NerdWallet
When it comes to choosing a checking account there certainly is not a one-size-fits-all solution. While it’s great to get recommendations from family members and friends, it’s also important to do your own research, as one person’s ideal checking account may be another’s worst nightmare. There are a number of issues to take into consideration before deciding on the option that works best for you, including the following six:
Branches: do you need them?
If you do the majority of your banking online, you might want to consider opening a checking account with an online bank. Online banks are able to offer higher interest rates due to their lack of branches, and often reimburse some or all of your ATM fees each month. Driving across town to a bank branch just to deposit your cash and checks could be an unnecessary hassle that you don’t need. And with an online bank you’ll still be able to talk to a representative by phone or ask questions about your account online.
Most financial institutions only allow customers to withdraw money from their own ATMs without paying a transaction fee. If you rarely withdraw cash or live near a number of ATMs sponsored by your financial institution, this may not be an issue. However, people who travel frequently or prefer to pay for purchases in cash will want to look into ATM fees before opening a checking account. If you find yourself using foreign ATMs more often than not, you may need an account that reimburses most or all of your ATM fees.
Minimum account balance
Some accounts come with restrictions on the minimum amount of money that must be kept in it at all times. If your balance drops below the limit, you may be charged penalty fees or lose eligibility for the best interest rates. For customers with a comfortable cushion of money in their accounts, maintaining a minimum account balance is not a concern. However, if you’re living paycheck-to-paycheck or don’t want to worry about maintaining a certain balance, look for free checking accounts that do not have minimum balance requirements.
Many customers are charged a monthly maintenance fee to have a checking account. However, there are often ways to get around this charge, such as depositing a certain amount of money into the account each month or maintaining additional accounts with the institution. If fees are a problem for you, a free checking account without monthly fees or other requirements might be the solution.
If you’re someone who likes to manage your money remotely, look for a checking account that offers online and mobile access. Many accounts have privileges like mobile check deposit, online bill pay, and the ability to transfer money online from one financial institution to another. If you prefer a self-serve approach handling your cash, look for these features.
It’s a good idea to shop around for the best interest rates when looking for a new checking account. Checking accounts with higher interest rates often require a higher minimum balance in order to earn interest, so they’re particularly rewarding for those who have more funds in their account. However, not all banks require high balances to earn interest—and they still offer other perks, like ATM fee refunds—so, be sure to look for the most rewarding account.
It’s important to choose a checking account you feel comfortable keeping your money in. There are countless accounts to choose from, so don’t settle for the first one that comes along because it’s convenient. While you many not find one that offers absolutely everything on your wish list, you should be able to find an account that satisfies your top priorities. Keep searching until you find one that best fits with your lifestyle.
All content contained in this blog post is for informational purposes only and should not be relied upon to make any financial, accounting, tax, legal or other related decisions. Each person must consider his or her objectives, risk tolerance and level of comfort when making financial decisions and should consult a competent professional advisor prior to making any such decisions. Any opinions expressed through the content in this blog post are opinions of the particular author only.